The Insulation Royal Commission has heard a senior bureaucrat felt the prime minister's department behaved 'unethically' by changing the design of the home insulation scheme without any notice. Kevin Keeffe was the assistant secretary of the Federal Environment Department when the home insulation scheme was rolled out in 2009.

MARK COLVIN: The insulation Royal Commission has heard that a senior bureaucrat felt the prime minister's department behaved unethically by changing the design of the home insulation scheme without any notice.

Kevin Keeffe was the assistant secretary of the Federal Environment Department when the home insulation scheme was rolled out in 2009.

Mr Keeffe has told the inquiry that he was blindsided by a decision to use a model that put installers in direct contact with householders.

Stephanie Smail reports.

STEPHANIE SMAIL: The Insulation Royal Commission is investigating the decision-making process behind the economic stimulus scheme, and whether enough attention was paid to safety.

Kevin Keeffe took on a lead role in the design of the home insulation scheme in early February 2009.

Today the inquiry has heard he was surprised and angry about a sudden change to the scheme's business model about a month later. Mr Keeffe had been working on a design where 15 big companies would take care of regulating the scheme nationally, including the management of safety and training.

But the Department of Prime Minister and Cabinet changed that, moving to a plan where insulation installers would deal directly with homeowners.

The inquiry heard staff from the prime minister's department announced the change to Mr Keeffe in a meeting with the parliamentary secretary for the stimulus scheme, former senator Mark Arbib.

Mr Keeffe told the inquiry he had no warning.

KEVIN KEEFFE (voiceover): It's not the done thing in public service culture for a central agency to not give someone at my level some warning that this was going to come, particularly if there was a parliamentary secretary involved in the meeting. To have that delivered to you on a plate is unethical and uncharacteristic of the relationship, and gave me great concern.

STEPHANIE SMAIL: In an email shown to the inquiry, Mr Keeffe wrote he was "cranky at being put into an unwinnable position where blame [flowed his] way".

The inquiry also heard the department of Prime Minister and Cabinet intervened in the training requirements for the stimulus scheme.

Kevin Keeffe told the inquiry the original plan was to include a five day training course. But his statement, tendered to the inquiry, shows that changed two months before the program began.

Mr Keeffe says his recommendation that all installers get training was overturned by Martin Hoffman, who worked for the Department of Prime Minister and Cabinet.

The statement says Mr Keeffe was told the primary concern was the rapid uptake of the home insulation program and getting people into jobs, and there were concerns training could slow the process.

It's not the first time the insulation Royal Commission has heard that job creation, especially for unskilled workers, was top priority for the program.

Last week the inquiry heard the prime minister's office and former senator Mark Arbib didn't want training entry requirements to be too onerous because it might slow the flow of labour into the industry.

When the scheme was launched in July 2009, workers only had to complete one day of training.

Matthew Fuller died installing insulation in Queensland in October that year.

Three other young men died before the scheme was dumped in February 2010.